Problems on Bankers Discount

Bankers Discount tricks are below! Solve them and rise above!

Introduction

Want to know the basic tricks about the banker's discount problems? In this blog, we have listed the formulas and the sums that are helpful for your competitive exams!

Banker's Discount

Formulas:

Present Value or Present Worth = PW, Banker's Discount = BD, True Discount = TD,

Banker's Gain = BG, Face Value or Amount = F

F = PW (1+RT / 100) BD = (FRT / 100)

TD = PW * (RT / 100) BG = BD - TD

PW + TD = F

TD (1 + RT / 100) = BD TD = FRT / 100 + RT

Amount = (BD * TD) / (BD - TD) BG = TD * RT / 100

BG = (TD)2 / PW

BD / TD = F / PW

1. The present worth of a sum due sometime hence is Rs. 686 and the banker's gain is Rs. 14. The true discount is?

Answer: Rs. 98

Explanation:

From the given data, Banker's gain = Rs. 14 Present worth = Rs. 686

Formula, True discount = √(Present worth * Banker's gain)

= √(686 * 14)

= √9604

= Rs. 98

True discount = Rs. 98.

2. A merchant owes a businessman Rs. 6400 due one year from now. The merchant wants to settle the accounts after 4 months. If the rate of interest is 12 % per annum, find the amount he should pay?

Answer: Rs. 5925.92

Explanation:

Amount = 6400

Rate = 12

Time = 4 months = 8 / 12 years

Formula, Sum = (100 * Amount) / [ 100 + (R * T) ]

The present worth of Rs. 6400 due in 8 months (after 4 months)

= (100 * 6400) / [ 100 + (12 * (8 / 12))]

= (100 * 6400) / [ 100 + 8]

= 640000 / 108

= Rs. 5925.92

The amount he should pay Rs. 5925.92.

3. The banker's discount on Rs. 1500 at 8 % is the same as the true discount on Rs. 1560 for the same time and at the same rate. Find the interval of time between the date of discounting and the legally due date?

Answer: 6 months

Explanation:

Let the interval of time be x years Formula,

Banker's discount = (Bill amount * R * T) / 100

True discount = (Bill amount * R * T) / [ 100 + (R * T)] Here, R = 8 %

T = x years

Banker's discount = (1500 * 8 * x) / 100

True discount = (1560 * 8 * x) / [ 100 + (8 * x)]

= (1560 * 8 * x) / (100 + 8x)

Here, Banker's discount is same as True discount (1500 * 8 * x) / 100 = (1560 * 8 * x) / (100 + 8x) 15 = 1560 / (100 + 8x)

(100 + 8x) = 1560 / 15

(100 + 8x) = 104

8x = 104 - 100

8x = 4

x = (4 / 8)

x = (1 / 2) years

= 6 months

The interval of time is 6 months.

4. The banker's gain on a bill due 1 year hence at 10 % per annum is Rs. 25. What is the true discount?

Answer: Rs. 250

Explanation:

From the given data,

Let Banker's gain = Rs. 25 Time (T) = 1 year

Rate (R) = 10 %

Formula, True discount = (Banker's gain * 100) / (R * T)

= (25 * 100) / (10 * 1)

= Rs. 250

The true discount = Rs. 250.

5. The Banker's discount on a certain sum 5 years hence at 4 % is Rs. 300. What is the present worth?

Answer: Rs. 7500

Explanation:

From the given data

Banker's discount = Rs. 300, Rate = 4 %, Time = 5 years

Formula, True discount = (Banker's discount * 100) / (Rate * Time)

= (300 * 100) / (5 * 4)

= Rs. 1500

Formula, True discount = √(Present worth * Banker's discount) 1500 = √(Present worth * 300) 2250000 = Present worth * 300

Present worth = 2250000 / 300

= Rs. 7500

The present worth is Rs. 7500.

Conclusion

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